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In a move that investors and marketers alike should applaud, Google’s figured out another way to make money off the site it bought for $1.65 billion three and a half years ago.  Today, Google explained that it’s come up with a tool to help small organizations advertise on YouTube.

Emily Williams, a member of the Inside AdWords team, explained on the corporate blog, "[W]e’re announcing another new feature in Display Ad Builder that lets advertisers use simple templates to create InVideo overlays and companion ads on YouTube."  (FYI: "An InVideo ad is an animated flash overlay that appears at the bottom part of a video that a user is watching.")

Williams later continued, "Now, any advertiser can use Display Ad Builder to turn their image ads into overlays and run a campaign on YouTube in minutes.  Depending on the type of campaign an advertiser wants to run, overlays can be bought on a CPC (Cost Per Click) or CPM (Cost Per Thousand Impressions) basis, and can be matched to YouTube videos based on numerous criteria (like demographics or content categories), or even on a video by video level."

This could prove to be a very popular option, considering that takeover ads on the YouTube homepage are said to be sold far in advance for hundreds of thousands of dollars.  And the move also earns points for being low risk, since it probably didn’t take much in the way of resources to execute and doesn’t cut any privacy corners.

Now we just get to guess how much Google will actually make from the new feature.  One slightly relevant note: earlier this month, a Citigroup analyst estimated that YouTube will pull in about $1 billion in gross revenue this year.

Investors and online advertising experts may want to consider for a moment what, exactly, has contributed to Google’s stupendous financial success (current market cap: $180 billion).  Now consider this: Google thinks mobile ad rates might surpass what’s come to be deemed the industry standard.

According to Reuters, Vic Gundotra, a vice president of engineering at Google, announced during a webcast, "We hope and believe that there’s even a chance that we could exceed desktop in the future."

Of course, this isn’t the first time someone representing the search giant has spoken highly of the mobile market; CEO Eric Schmidt and CFO Patrick Pichette, among others, have emphasized its importance before.  Earlier this month, a VP of advertising even claimed that desktops will be irrelevant in three years’ time.

Still, Gundotra’s comment may signify just how much Google is betting on the success of Android and mobile advertising, and how seriously it will take threats posed by Apple, Microsoft, and other companies.

Here’s one last interesting tidbit: with regards to China, Pichette said during the same webcast that the country’s "another great market in which Android should flourish."

At SXSW, Rob Millis and Will Coghlan of the newly launched Dynamo Player talked about different routes online video producers can take to try and make a buck. While the discussion ultimately led up to the duo’s demo of its new product, it was not above representing some different options fairly. The two talked about some of the pros and cons of advertising, such as:

Pros

- Fosters dramatic growth (financed first forty years of TV and last 15 years of Internet content)

- Blip.tv and YouTube define a stable market

- Reliable high quality programs…

Cons

- High value advertising demands high value programming (production). Costs a lot up front – higher costs to return

- Content can be unreliable, too hot to handle, or simply unappealing to advertisers. Short films, docs, r-rated or controversial content can’t get high value CPM.

- Advertisers can’t depend on a certain number of viewers

- Random advertising can damage brand while paying little to nothing

- Must have very, very large audience

- Can put a plane crash next to an ad for Delta or something to this effect

So the question is, will people pay for video online? They talked about how a lot of people are already doing just that through services like iTunes, which the pair say "changed the marketplace."

When deciding whether you want to ask people to pay for your content, you should ask yourself the following questions, according to Millis and Cohlan:

- What content do you pay for now?

- Have you ever quit halfway through a payment or subscription process arrangement?

- How often do you click away because of pre-roll ads?

- Are you willing to download software?

"Asking your audience to pay for your content is about eliminating these ‘why bother’ factors," they say.

Then ask yourself:

- How do you want to sell your content?

- Does it need to happen now or are you willing to wait for  approval?

- How much do you need to charge, and how soon do you need to get paid?

- How much info do you want to ask your viewers for?

- How technically savvy are you?

- How important is image quality?

- Do you want your viewers to go to your site to watch or somewhere else?

- Do you want to be able to embed your video?

- Do you want to allow your viewers to share?

- What kind of content do you have – serial, one off, short format, feature length?

- How much publicity do you want/need?

"Ask these questions before you commit to a solution," they say.

One option is what they refer to as the Ze Frank model. This is a show that used drop.io to package shows that are otherwise free, and sell them together, so viewers can take them and easily watch them on their iPods.

Another option is to work with a partner like re:frame or NewVideo, which will work with you on getting stuff into iTunes or Hulu.

Then there are sites like MyContent.com and IndieFlix. With MyContent.com, you get choices like free streaming, rental streaming, and selling through the site as a paid download. They are your partner, and they only pay you after costs are covered. They have a revenue share deal. MyContent.com will take 35% after costs, and they charge a small monthly processing fee, according to the Dynamo guys.

With Indieflix, you can upload content through them, and sell it as a DVD or make it available as a paid stream, but they’re fairly selective about their content.

Another option they discussed was Amazon’s Create Space. Advantages of this, they say, are that Amazon’s a leader in cloud computing – they can store and serve content more efficiently, and at a lower cost, they are a well-recognized brand, and they’re connected to a lot of TVs and living rooms. They’ll list films on IMDB for you, and stream stuff to the XBox. However, they take 50% of royalties, and you can only suggest a price for your video.

Then there are YouTube rentals, a system Google introduced not too long ago, at Sundance. They let content creators set the price and viewing window, and they have the obvious huge advantage of social media for promotion. It doesn’t hurt that YouTube is also the second largest search engine, behind Google itself.

YouTube lets you use Google Checkout, which is easy enough, and content streams quickly. You need to use an AdSense account, and as you may know, Google is not up front about how much revenue sharing they do, although it’s supposed to be "the majority".

You can read about Dynamo’s own option here.

A Google exec recently said, "In three years’ time, desktops will be irrelevant." That’s debatable, but there’s no question that mobile use will have grown much more than it already has. Based on comments in a recent keynote, Microsoft CEO Steve Ballmer doesn’t seem to think PC use is going to drop too much, but he did say, "Mobile queries are just going to keep going up and up and up."

Do you think desktops will be irrelevant in 3 years? Share your thoughts here.

A study released last month found that the number of mobile phone subscribers is on track to increase from 4.6 billion to 5 billion globally by the end of 2010. Another study found that consumers are getting more comfortable with mobile shopping.

Mobile Search

Google has dominated the search market for a long time, and while this still continues to be the case, it’s important to note that search in general changes with mobile. People are searching in different ways than just using their favorite search engines. They’re using different apps. They’re using their voices. They’re scanning barcodes for instant access to product information. The number of ways people are finding information with their phones is only going to keep increasing. On mobile, it’s not just about Google, Yahoo, and Bing.

That’s not to say these three aren’t still incredibly important to mobile. In fact, the search share among these top search engines may even become more greatly divided as time goes on. We’re seeing different mobile carriers and manufacturers making deals with these companies, which affect the default search options for various devices. As we discussed before, mobile search engine use may be largely dictated by device popularity, which is (in my opinion) one of the biggest things Bing will have going in its favor in terms of market share – Microsoft’s new Windows Phone 7 phones will come with Bing hardware keys, meaning the most convenient way to search on these devices will likely be to hit a single button taking the user to Bing. If these devices become popular, it could be huge for Microsoft in search.

As far as Google indexing and mobile sites goes, Google’s Matt Cutts says, "If you can find a way where your existing site will work well in mobile browsers, we’re not worrying about supporting two completely different sites."

To learn about this subject in more detail, read the Google Webmaster Central Blog posts: Help Google Index Your Mobile Site, and Running Desktop and Mobile Versions of Your Site.

Mobile Search Advertising

When it comes to AdWords, Google says to create separate, mobile-focused campaigns so you can optimize keywords, ad text, and landing pages for people using mobile devices. Google shared an interesting case study this week looking at Razorfish’s mobile AdWords approach. They shared the following details:

- The Razorfish team started by duplicating the existing desktop campaigns and switching the settings to target mobile devices with full internet browsers.

- Since their client had a well-known brand name, they focused on branded keyword terms with enough traffic to help them learn quickly about what was working best for their campaigns.

- To measure performance, they tracked several conversion metrics including whether a mobile user looked up the brick and mortar store location or downloaded a coupon from the website. Right away, they saw a 7.5% lower cost per conversion on mobile devices, encouraging them to test ways to optimize their mobile campaigns.

- Razorfish tested whether variations in the campaign’s landing page would affect conversion rates. The team hypothesized that mobile users might be looking to take a specific action, and by starting the user’s experience closer to that action, the client would see better results. As it turned out, for this client, they saw much higher conversion rates when the user was directed to a landing page that showed nearby store locations.

- Finally, they tested variations in the ad text. Four versions of ad text were tested, including the original copy used in desktop campaigns. Each of the three new versions provided over 9.3% lift in conversion rate over the strongest performing copy in their desktop campaigns.

When it comes to Yahoo and Microsoft search advertising, things are about to get more appealing here in general, and presumably, that includes mobile. Microsoft and Yahoo advertisers will have the audiences of both search engines to view ads once Yahoo and Bing get their integration done.

Wrapping Up

One of the most important things any search marketer can do with regards to a mobile strategy, is to simply keep up with the latest mobile trends and innovations. This space is rapidly evolving, and new apps are released frequently. Pay attention to hot apps, and how your target audience is engaging with them. What devices, operating systems, and browsers are hot? Monitor studies and surveys that delve into demographics. Try to stay ahead of the curve.

Do you have a mobile search strategy? What suggestions do you have for improving in this area? Comment.

StumbleUpon has launched a new advertising system, which the company says helps cost-effectively deliver advertiser content to targeted audiences, while increasing the opportunity for content to go viral.

StumbleUpon finds and recommends ad content it deems relevant to targeted audiences’ interested based on demographic and topic areas. StumbleUpon users by simple nature of the site choose the content topics of interest to them, and are delivered random content based on this). This makes for an interesting way of delivering ads.

"With StumbleUpon Advertising, we’re solving the challenge of how advertisers can get more content that is relevant and impactful in front of their targeted audiences," says StumbleUpon CEO and Founder Garrett Camp. "We are dedicated to providing the tools that help advertisers identify and reach their audiences, measure campaigns effectively and gain real-time user feedback."

"After testing the StumbleUpon Advertising system for eight months, we know it’s an extremely cost-effective way to drive qualified traffic and let the content speak for itself," said Jason Clement, Director of Findability at Wieden + Kennedy. “Since StumbleUpon Advertising targets content to users based on their personal interests, we can be confident that our content is reaching the most receptive audience possible. And when an audience enjoys our content, the reward is a healthy amount of free, organic traffic."

"StumbleUpon Advertising makes it easy and cost-effective to deliver the right content to a new audience of our target users," said Ben Tider, Assistant Director, Audience Development at Time Inc. Lifestyle Digital Group. “With streamlined campaign set-up and management, we can better optimize ads and recommend content based on the individual user. Because readers can self-identify the types of content we show them, they are more engaged and likely to share it with friends."

"StumbleUpon Advertising enables brand advertisers to serve up compelling content while users are searching or ‘stumbling’ around the Web," said Josh Spear, Founding Partner of Undercurrent. "With StumbleUpon Ads, an advertiser’s content is not an interruption, but rather a fully integrated experience that affords an opportunity for additional exposure when audiences like or respond well to the content. It is comparable to a banner that becomes more cost efficient based on positive viewer feedback. The new user interface also greatly enhances the service by delivering advanced analytics and more detailed campaign management tools."

StumbleUpon claims to generate nearly 600 million recommendations per month for its community of almost 11 million members.

Related: About a year ago, we interviewed StumbleUpon’s VP of Business Development about advertising on the site.

Google is launching ads on the home page, search page, and browser page on the mobile version of YouTube in the U.S. and Japan.

"This is a great way for advertisers to reach YouTube viewers across multiple platforms," says Google Strategic Partner Development Manager Taylor Cascino. "In fact, at launch YouTube will immediately provide one of the largest audiences for a mobile ad campaign anywhere on the mobile web. And because YouTube mobile attracts early adopters, the site can deliver to advertisers a coveted demographic of tech savvy trendsetters. We’ve already seen some early campaigns run on YouTube’s mobile site by advertisers like Sony (for the DVD release of "District 9") and Kia, both of whom were able to easily reach their target audience, no matter where they were looking for video."

YouTube’s mobile site traffic grew by over 160% in 2009, and you can probably expect that growth to continue along with smartphone usage. Don’t forget that YouTube is the number 2 search engine on the web. That’s a lot of people searching for videos.

"The increased usage of high-end devices like the iPhone and Android is also making mobile advertising easier and more effective for advertisers," says Cascino.

Ads on the YouTube mobile site will come in the form of banner ads sold on a full-day basis. YouTube tested the mobile ads with brands like L’Oreal and Land Rover, and the company says these showed strong results in terms of click-throughs, user experience, and brand awareness.

Yahoo’s line of thinking with regards to the big Microsoft/Yahoo search and advertising deal is that it will benefit both Microsoft and Yahoo’s advertisers, as well as consumers and publishers.

It will benefit advertisers because it will increase search volume, with results from both Bing and Yahoo being taken into consideration. It will benefit consumers because by combining advertisers from both properties, there will be a greater pool to deliver sponsored results from, which Yahoo says will mean increased relevance. It will benefit Yahoo, Bing, and their publisher partners with increased liquidity, participation, and relevance. That is basically the sum of it, according to Yahoo Vice President of Search Advertising David Pann.

WebProNews recently sat down with Pann and discussed these things and how the deal will affect advertisers.

According to Pann, the migration across all international markets will occur over the next 24 months or so, but they will not rush it at the expense of quality, they say. "Our focus is really about developing a plan that is smooth, seamless, and with quality. So we anticipate doing the U.S. migration sometime before the holiday season in 2010," says Pann.

In the above interview, Pann goes on to talk about how things will be split between Yahoo and Microsoft. He also addresses some privacy concerns, related to data sharing between the two companies.

WebProNews also interviewed Yahoo Sr. VP of Search Products Shashi Seth and Director of Search Marketing David Roth, both of whom talked about the deal in more detail. You can catch both of those interviews, as well as a recent keynote from SMX West where the deal was also discussed, here.

The Wall Street Journal has the Blogosphere abuzz with rumors of Google testing a new set-top box with Dish Network, which would allow people to search television and online video content like YouTube. Google has given the usual "we don’t comment on rumor or speculation" statement on the subject.

According to the WSJ, only a small number of Google employees and their families are testing the box, which runs on Google software (Android is implied), and lets users create personalized lineups of shows. The testing has reportedly been going on since last year. Aside from these things, the details are sketchy at best, which can only mean one thing: let the wild speculation commence.

Assuming that this service ever comes to fruition, it could open up a lot of new opportunities for Google to dominate or at least heavily compete in areas in which it isn’t dominating already. Rather than doing too much speculation myself, allow me to just list some questions and open this up for discussion:

- What if Google gets exclusive deals with Dish Network as well as other major satellite and cable providers? Google TV Ads already has deals in place to provide ads on close to a hundred cable networks.

- What if Google makes more deals to boost its movie rental selection on YouTube? How big of a player would that make YouTube in the movie rental space? This will be something to keep an eye on with or without this box as Internet-ready TVs permeate the mainstream.

- Will Yahoo and Bing be looking at opportunities like the Google/Dish Network box? Are they already?

- What would widespread integration of web search and television mean for TV advertising?

In the not-too-distant future, we may start to really see TV advertising getting more targeted, which has long been the medium’s biggest downfall. People often record shows simply so they don’t have to watch the commercials. What if the ads were targeted at the individuals watching the TV? What if they were relevant? Search advertising paved the way for this kind of relevancy, and may just be a key to the future of TV advertising in a world where viewers want their programming on demand.

There I go off on that speculation. This all sounds good in theory, but a lot of puzzle pieces have to fall in place, and a lot of stars have to align for this to become a reality. Deals must be made, and money must be spent. That’s not to say the concept is far-fetched.

Consider that advertisers are finding online to be a better option than even the super bowl in some cases. This past Super Bowl, Pepsi skipped a TV spot for the first time in 23 years. TV is going to have to adapt.

Tell us what you think.

Spending on online advertising and marketing will surpass print in 2010 for the first time, according to a new report from Outsell.

Companies will spend $119.6 billion on online and digital strategies, from search engine keywords to webinars, while committing $111.5 billion to print such as newspapers and magazine ads. Overall, U.S. spending on advertising and marketing will increase in 2010, but only by 1.2 percent to $368 billion.

Outsell forecasts spending, share, and growth for five media categories including online, events, print, TV/radio and PR/other.

"Advertisers are directing dollars toward the channels which generate the most qualified leads and most effective branding," said Chuck Richard, Vice President and Lead Analyst, Outsell.

"As they emerge from the recession, they need more accountability, and they’re spreading their spending over a widening set of options."

Print magazine advertising will be up 1.9 percent to $9.4 billion even with the popularity of online channels.

Other key findings include:

*51 percent if B2B marketers rate Facebook as extremely or somewhat effective, followed by LinkedIn (45%), Twitter (35%) and MySpace (25%).

*B2B advertisers see cross-media marketing as most effective; 78% combine three or more major marketing methods.

*Methods creating the highest B2B ROI are topped by advertisers’ own websites, followed by conferences, exhibitions and trade shows: direct mail; search engine keywords; and e-marketing/e-newsletters. 
 

In a single day, Bing has increased the number of fans of their Facebook page by 500 percent. How? By using clever social media advertising embedded within the popular Facebook application Farmville.
The advert appeared yesterday inside the game Farmville, encouraging players to become a fan of Bing in exchange for free farm cash (the virtual [...]

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Bing Proves Power of Facebook Advertising